The Office of Foreign Assets Control on Thursday will issue an interim final rule to extend recordkeeping requirements for certain transactions from five to 10 years to make them consistent with the recently expanded statute of limitations for certain sanctions violations. The rule will become effective six months after publication.
Earlier this year, Congress passed the 21st Century Peace Through Strength Act, which contained multiple provisions related to various foreign policy matters, from fentanyl trafficking to a ban on TikTok. Included in the legislation was a provision that doubled the statute of limitations for civil and criminal violations of the International Emergency Economic Powers and the Trading with the Enemy Act. The final rule updates OFAC’s recordkeeping requirements to be consistent with the new statute of limitations. The agency plans to take public comments on the changes.
OFAC expects the rule’s burden on financial institutions and other covered organizations to be minimal “because the records required to be maintained are likely maintained under standard business practice,” according to the rule. “The recent increase in the recordkeeping period to 10 years from five years could impose a temporary incremental burden on recordkeepers while they update their recordkeeping practices and adjust storage requirements to maintain records for a longer period of time.”
